Bi-Monthly Monetary Policy of RBI

Current Context: The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) released the Monetary Policy Statement, 2022-23 Resolution of the MPC.

• The RBI downgraded India’s GDP growth forecast:

1. from 7.0% to 6.8% for FY23
2. from 4.4% to 4.2% for Q3 FY23

• It projected the country’s GDP growth to be:

1. 7.1% for Q1 FY24
2. 5.9% for Q2 FY24

• The inflation was projected to be:

1. 6.7% for FY23
2. 6.6% for Q3 FY23
3. 5.9% for Q4 FY23

• RBI’s MPC also hiked the repo rate by 35 basis points (bps) or 0.35% to 6.25% with immediate effect.
• The dispensation of enhanced Held to Maturity limit (23%) of deposits wrt the Statutory Liquidity Ratio (SLR) securities was extended by the MPC up to March 31 2024.
• RBI is India’s central bank which comes under the Ministry of Finance. It was established in 1935 with its headquarters in Mumbai. The current Governor of it is Shaktikanta Das.

Question:

Q.1 According to the RBI, for FY23, India’s GDP growth rate is expected to be?
a. 6.0%
b. 6.5%
c. 6.8%
d. 7.0%